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S&P takes various actions on GenOn
Standard & Poor's said it affirmed its CCC+ corporate credit ratings on GenOn Energy Inc. and affiliate GenOn Energy Holdings Inc. and revised the outlook to negative from stable.
At the same time, the agency affirmed the B- issue ratings on GenOn Energy Inc.'s $1.95 billion senior unsecured notes. The recovery rating on this debt remains 2, indicating expectations for substantial (70% to 90%, at the low end of the range) recovery in a payment default.
S&P also affirmed the B issue rating on GenOn REMA LLC's $641 million pass-through certificates (about $376 million outstanding). The recovery rating on this debt remains 1, indicating expectations of very high (90% to 100%) recovery in a default.
In addition, the agency lowered the issue rating on GenOn Mid-Atlantic LLC's (GenMA) $770 million of pass-through certificates (about $672 million outstanding) to CCC+ from B- and revised the recovery rating to 3 from 2. The 3 recovery rating indicates expectations for meaningful (50% to 70%, at the high end of the range) in a default.
S&P also lowered its issue rating on GenOn Americas LLC's (GenAM) $850 million unsecured notes to CCC+ from B- and revised the recovery rating to 3 from 2. The 3 recovery rating indicates expectations for meaningful (50% to 70%, at the high end of the range) in a default.
"GenOn's credit profile has weakened following a progressively weaker forward power curve due to depressed natural gas prices, and lower gross margins due to stagnating demand and milder weather patterns, resulting in a further weakening of financial measures," S&P credit analyst Aneesh Prabhu said in a news release.
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